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Wells Fargo & Co. is seeking to reassure Wachovia Corp. employees, indicating that massive layoffs are not a part of its acquisition plan.

“We know this has been a time of great uncertainty for Wachovia team members and many of its customers as their company has gone through a very painful and challenging time,” Wells Fargo Chief Executive John Stumpf said late Thursday. “We want to assure them we’ll do everything we can to make the integration of our operations as smooth as possible. An important measure of success for this integration will be our ability to retain as many of the talented Wachovia team members as possible.”

San Francisco-based Wells (NYSE:WFC) is generally expected to avoid layoffs, if possible, in the largest acquisition in the company’s 156-year history. Even in making last year’s in-market, Bay Area acquisition of Greater Bay Bancorp, Wells kept the vast majority of the acquired bank’s employees.

The acquisition by Wells was generally preferred by Wachovia employees as the West Coast powerhouse had less geographical overlap than rival bidder Citigroup Inc.

Shareholders also preferred Wells because its deal offered considerably more than the $2.16 billion proposal offered by New York-based Citigroup (NYSE:C). But the value of the all-stock buyout has dropped significantly as Wells — along with most other financial institutions — has taken a beating on Wall Street.

Wells’ deal for Wachovia was valued at $15.1 billion when the offer was announced Oct. 3. It is now worth about $11.4 billion, based on Wells’ closing price Thursday.

Federal regulators had attempted to broker a compromise between Citigroup, whose initial deal they supported, and Wells about dividing Wachovia. Citigroup gave up on those negotiations Thursday afternoon, clearing the way for Wells to buy Wachovia.

In a statement released Thursday night, the Federal Reserve acknowledged the “considerable efforts” of both banks in the negotiations. It said that with Citigroup’s decision to abandon its efforts to block the deal, the Federal Reserve “will immediately begin consideration of the filings submitted by Wells Fargo for approval to acquire Wachovia.”

There still could be some trouble ahead, according to Morningstar Inc. analyst Jamie Peters, who follows Wachovia (NYSE:WB). In a note issued Thursday night, she says Wells “has a lot more to worry about than it did when the deal was announced last Friday.”

The biggest problem, she says, could be in the capital markets. As it proposed the buyout, Wells planned to raise as much as $20 billion in fresh capital. But that could prove difficult.

“Bank of America struggled earlier this week to raise $10 billion of capital — and ended up selling at a steep discount to its preannouncement price,” Peters wrote. “This might give Wells pause and, in our opinion, might possibly cause the company to find a way to reconsider the deal price or the deal altogether.”

Wells did not indicate any reconsideration of the deal price late Thursday, when it announced it was prepared to go ahead with the purchase.

The Wells-Wachovia combination would be the nation’s third banking powerhouse, with about 10,700 branches and 12,200 ATMs stretching from coast-to-coast. Wells Fargo and its ubiquitous stagecoach will now roll from New York City to Miami in the East, through Texas and into the West with branches from San Diego to Seattle. The Wachovia purchase will put Wells directly in competition with Charlotte-based BofA (NYSE:BAC) and JPMorgan Chase & Co. (NYSE:JPM), the two other U.S. banks that reach from coast to coast.

The combined company will be called Wells Fargo and be based in San Francisco. It will have $1.42 trillion in assets, $787 billion in deposits and 280,000 employees.

Wells Chairman Dick Kovacevich, Stumpf and their team will have their hands full in the days and weeks ahead, handling triage among Wachovia employees who became increasingly nervous about their futures as Wells and Citigroup fought over the Charlotte bank.

Wells is likely to find a few gems at the Charlotte bank to extend into Wells’ territory beyond Wachovia’s huge presence in the East. About a year ago, Kovacevich told analysts that Wells’ customer service in retail banking had room for improvement. Wachovia has consistently won high marks in that department. And Wachovia’s Way2Save program is also a candidate for going national under the Wells Fargo banner.

For complete Charlotte Business Journal coverage of the developing Wachovia story, click here.

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